Skip to main content
opinion

The Reid family harvest their wheat crop near Cremona, Alta., on Sept. 27, 2020.Jeff McIntosh/The Canadian Press

It was about a year ago when Geoffrey Briant received a call from his old friend Brian O’Sullivan. Mr. O’Sullivan had sold his stake a few years earlier in a wind farm that supplies most of the power to Mexico’s biggest auto plant, and was looking for new opportunities in the renewables sector.

Mr. Briant is a veteran institutional-investing executive who had previously been retained by Britain’s Earth Capital – the investment manager for a sustainability fund run by members of Europe’s Nobel family – to introduce it to Canada’s top 100 pension funds.

Mr. O’Sullivan had spent four decades developing renewable energy projects around the world. They met in 1978, and today are nearing their 70th birthdays.

Mr. Briant says when they spoke last year, Mr. O’Sullivan told him: “ ‘We have one last hurrah in us. I’ve never built a solar or wind farm in Canada. If you’ll do it with me, let’s be 50-50 partners.’ I said, ‘You’re on,’ and that started it.”

That sowed the seeds for Cachet Capital Inc., an unusual startup dedicated to renewable energy and other sustainable technologies. The company is now in the process of raising its first $25-million of capital amid an environmental, social and governance (ESG) investment boom involving even the world’s largest funds as countries seek to achieve net-zero carbon emissions.

Mr. Briant is Cachet’s chief executive officer, and Mr O’Sullivan heads up a unit that is seeking international renewable energy opportunities. The pair have recruited a roster of veterans of Canadian institutional investing and pension funds.

One of the most prominent of the group is Cachet’s executive chairman, Leo de Bever, the former CEO of Alberta Investment Management Corp. and a director of Sustainable Development Technology Canada, the Crown-owned cleantech seed-funding agency. Mr. de Bever, 72, was the first call the founders made to help get the fund off the ground.

Mr. de Bever immediately pushed the idea of a private-equity unit that could fill what he sees as a big gap in Canadian sustainable development: funding the early commercial stage of companies in $20-million to $40-million chunks. Often, Canadian technology developers are snapped up by U.S. companies with deep pockets as they get to the commercialization stage. A particular interest of Mr. de Bever is in reducing emissions in agriculture and improving soil, and a Calgary-based company called Sulvaris, which produces fertilizer from waste products while reducing greenhouse gases, is an early funding target.

“The truly innovative stuff is done by small companies. What we’re finding is the pension funds want to deploy big wads of money, but that doesn’t advance the deployment of truly new technologies. That’s a problem I see,” he said.

Besides international wind and solar projects and the cleantech fund, Cachet has formed a Canadian division to acquire renewable energy and storage ventures. The federal government may amend tax regulations for renewables projects this year, and if they do so, the group plans to offer tax-advantaged partnerships to Canadians in those ventures.

Other executives and directors have experience in investment with a green hue. Its chief sustainability officer, Rosalie Vendette, was Desjardins Group’s leading responsible-investment executive for a decade until 2019. Among the directors are Andrew Claerhout, a partner at Searchlight Capital and former head of Ontario Teachers’ Pension Plan’s $25-billion infrastructure, natural resources and renewables portfolio; and Oona Stock, former vice-president of talent and performance at Caisse de dépôt et placement du Québec.

In his many years of investing on behalf of pension clients, Mr. de Bever found there are two personality types in the technology-development business – engineers who are whizzes at developing technology to reduce carbon emissions but are unable to sell their ideas to the investment community, and entrepreneurs that tell a great story but can’t put a development strategy into action.

“I prefer to work with the first group, because I know at the end, if I can help them with the area where I have expertise, it will work,” Mr. de Bever said. “Whereas the other one, I’m not so sure. You can raise a lot of money but if you can’t deploy it efficiently, that’s going to end badly. This is the dichotomy I see in ESG.” It’s where veteran executives can put their “grey hair” to use, he said.

Jeffrey Jones writes about sustainable finance and the ESG sector for The Globe and Mail. Email him at jeffjones@globeandmail.com